Hunker down. That’s what corporate India did in 2013; it was simply too risky to venture out. As an ineffective government dragged its feet on clearances and hundreds of projects stalled, there was little incentive to invest. Even money that had been put to work was idling, thanks to the severe shortage of gas, iron ore and coal; the dramatic drop in demand, whether for trucks or toothpaste, meant inventories were at their leanest.

Never before, perhaps, had Tata Motors kept its factories shut for so many days in a year, never before had bankers so bemoaned the lack of lending opportunities.

In the end, the capex cycle failed to turn, the economy slipped further, leaving manufacturers with smaller volumes, little pricing power and big bills for raw materials and interest payments. There were the lucky few that prospered, mainly IT players, drug majors and other exporters who gained from a depreciating currency, but, for most in India Inc, a weak rupee hurt the bottom line.

The year 2013 was a time best forgotten, a year in which balance sheets remained bloated, cash flows were crippled and profits perished. The numbers said it all — for a clutch of 1,700 companies, net profits in the three months to September collapsed completely, falling 1% y-o-y.

It wasn’t just the smaller businesses that were reeling under the slowdown. In Bombay House, the headquarters of the Tata Group, where Cyrus Mistry had just taken charge of a large, unwieldy and a not-so-profitable $100-billion conglomerate, there were more problems than one could have imagined. Mistry, like many of his fellow industrialists, had his share of over-leveraged companies, capital-guzzlers and, like others, he too was hoping the authorities would be less rigid on regulation and put in place stable policies. It didn’t help that the environment was hostile, not just at home but also in Europe to which his group had a considerable exposure.

In retrospect, the approach adopted by the chairman of Tata Sons to consolidate the businesses, both at home or abroad, turned out to be the best.

There were no big-bang acquisitions although assets may have been available cheap; it was all about making the most of what the group already had — even the pursuit of a bigger stake in Orient Express was given up. The idea was to stick to the knitting — Tata Sons decided it did not want to rush